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Dover Manufacturing Company makes two products. The company's budget includes $200,000 of overhead. Dover recently implemented an activity-based costing system and had determined that overhead
Dover Manufacturing Company makes two products. The company's budget includes $200,000 of overhead. Dover recently implemented an activity-based costing system and had determined that overhead can be broken into three overhead cost pools: cutting, machine set-ups, and shipping. The following is a summary of company information: Cutting Machine Set-ups Shipping Estimated Cost $24,000 $8,000 $20,000 $52,000 Estimated Activities 500 cuts 200 machine hours 40,000 shipments Dover's overhead rates using the activity-based costing pools are: None of the above Cutting: $48 per cut; Machine Set-ups: $40 per machine hour; Shipping: $0.50 per shipment Cutting: $24 per cut; Machine Set-ups: $20 per machine hour; Shipping: $0.50 per shipment Cutting: $2.16 per cut; Machine Set-ups: $6.50 per machine hour; Shipping: $2.50 per shipment
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